Contents
Overview
Sources
Wet or Dry Settlement
Wet
Definition
The Department has determined that ?good funds? include the following: (1) Cash or wire transfers. (2) Cashier?s check. (3) Certified check. (4) Teller?s check. (5) Any other instrument that has been determined by the Board of Governors of the Federal Reserve System to be the functional equivalent of a cashier?s, certified or teller?s check. (6) Uncertified funds in amounts less than $1,500, including checks, traveler?s checks, money orders, and negotiable orders of withdrawal, provided that multiple items are not used to avoid this $1,500 limitation; (7) Uncertified funds in amounts of $1,500 or more, drafts, and any other items when collected by the financial institution. (8) State of Texas warrants. (9) United States Treasury checks. (10) Checks drawn on an insured financial institution and for which a transaction code has been issued pursuant to and in compliance with, a fully executed immediately Available Funds Procedure Agreement (T-37) or a fully executed Immediately Available Funds Procedure Agreement (Agent Designation for Federally-insured Lender) (Form T-37A) with such financial institution. (11) Checks by Texas city and county governments. Title Ins. Basic Manual, Sec. IV, P-27.
Requirements
A title insurance company, title insurance agent, or direct operation may not disburse funds from a trust fund account until good funds related to the transaction have been received and deposited in the account in amounts sufficient to fund any disbursements from the transaction. TX Ins. Code 2651.202(a).
The Department has defined ?received and deposited? to require that good funds must be in the possession of an employee or representative of the trustee, and a record of receipt must have been entered on the books of the trustee, but only if the funds are actually delivered for deposit to the financial institution in a timely manner, which may not exceed three business days after the funds are received. The financial institution or branch in which the trust fund account is maintained must be located within the geographic bounds of Texas. In the case of a wire transfer or other direct deposit, good funds are considered to be ?received and deposited? when the financial institution notifies the trustee that it has received the funds. Title Ins. Basic Manual, Section IV, P-27.
Exceptions to Requirements
N/A
